This comparison has been designed with the typical HRA self-employed business owner in mind. With increasing health care costs, self-employed business owners are looking to consumer-driven health plans, such as the MSA, HRA, HSA, and FSA. Below you willfind information on the HSA and HRA to help you understand the difference between two of the more popular consumer driven plans. Health Reimbursement Arrangement (HRA) and Health Savings Account(HSA).

Overview

• HRA - An employer funded benefit plan,without any salary reduction, thatreimburses employees for qualifiedmedical expenses. The HRA was created in 1954and over the last 50 years hasbeen thoroughly reviewed,clarified and tested.
• HSA - An account created inconjunction with a High Deductible Health Plan (HDHP) to pay for qualified medical expenses.√ The HSA was created in late 2003 and many clarifications are still pending.

Eligibility

• HRA - Any employee that satisfies the employer established non-discrimination rules under IRC§ 105(h). The HRA does not require a HDHP. None.
• HSA - Any individual covered under aqualifying HDHP and notqualified for Medicare or underanother non-qualifying healthplan.√ Must have a qualifying HDHP.

Health Plan Requirements

• HRA - None. The HRA will work with anyHealth Insurance policy,regardless of deductibleamounts and out of pocketmaximums.
• HSA - For individual coverage anannual deductible no less than$1000 with a maximum annualout of pocket limit of no morethan $5250. For familycoverage an annual deductibleno less than $2000 with anannual out of pocket limit of no more than $10,500.√

Funding

• HRA - Employer funded. Employer controls benefitdollar amounts of the HRA.
• HSA - Employer and/or employeefunded.

ContributionLimits

• HRA - Unlimited*.
• HSA - *Within plan parameters.100 % of the deductible or$2700/$5450*, whichever is less.

*Born before 1952, add $700.

• The HSA is restricted to amaximum funding of$2700/$5450(individual/family) per year. 
• Tax Treatment HSA Contributions from the Employer are Deductible by the employer.
• Employee Non-taxable to the employee.EmployerEmployerportion is non-taxable to the employee and deductible byt he employer. Employee Employee funding is typically a post-tax contribution and deductible as a personal expense on the 1040.

HRA is 100% deductible from a federal, state, and self-employment taxes standpoint. Non-Discrimination Requirements Subject to non-discrimination requirements under §105(h). Employer must make“comparable” contributions for all employees.

With an HRA, the employerhas the ability to excludecertain employees (i.e. Part-time, Age, Length of service)Allowed BenefitsReimbursement of qualified healthinsurance premiums and medicalexpenses under § 213 (includingOTC drugs).Reimbursement of qualifiedmedical expenses under § 213(including OTC drugs). NOhealth insurance premiums.√Health Insurance premiumsare also deductible with theHRA.Carry overUnused funds may be carriedforward to subsequent years.Unused funds may be carriedforward to subsequent years.√HSA funds may be investedand earn interest non-taxable.AdministrationGenerally self-administered orTPA.Funds held by qualifying trustee(ie. bank, insurance company,etc.), directed by individual.√With the HRA, funds are nottransferred to/from a thirdparty (ie. bank, insurancecompany, etc.).* S-corporation shareholder employees exempt from FICA tax onlyNOTE: Insurance regulations may prohibit the reimbursement of health insurance premiums in your state. For additional details, please contact a BASE® Benefit Specialist.M:REV_BASE_3/5/07
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HSA or HRA…What is the Real Difference?HSA1) Must have a high deductible HSA compliant health insurance policy.A. Health insurance premiums are not deductible as a business expense.B. Premiums may be deductible on the 1040 as a personal expense.2) Must have a separate Trust account* that the client deposits money in throughout the year. These deposits are tax deductible from federal and state income tax, and can be withdrawn to cover non-premium medical expenses.*Some expenses that can be paid from the Trust account include: Chiropractor fees, Contact lenses, Crutches, Dental treatment, Drugs (prescription), Eyeglasses, Hearing aids, Hospital services, Laboratory fees, etc. Note: Health insurance premiums are excluded.HRA1) Any health insurance policy will work with the HRA.2) All family related medical expenses that occur including health insurance premiums and any IRC Section 213 medical expense are deductible as a business expense with the HRA, saving federal, state, and self-employment tax.Examples of tax savings with the HSA and HRA:Assuming a self-employed sole proprietor with a family of four has a $2,500 deductible health plan and $4,800 in yearly health insurance premiums (the national average for BASE clients). Their maximum HSA contribution is $2,500 and they have $6,400 in actual out-of-pocket expenses (the national average for BASE clients).If your clients’ business qualifies for the HRA, there are substantially more tax dollars to be saved by having them utilize the HRA.NOTE: Insurance regulations may prohibit the reimbursement of health insurance premiums in your state. For additional details, please contact a BASE®Benefit Specialist.HSAPremiums $4,800HSA Contribution $2,5001040 Deduction $7,300x 20%(15% Federal + 5% State)Tax Savings $1,460HRAPremiums $4,800OOP Expenses $6,400Schedule C Deduction $11,200x 35.3%(15% Federal + 5% State + 15.3% Self-Employment)Tax Savings $3,953MRev_3/2007

• Aetna HMO Deductible Plan
• Aetna HDHP $3000 80/50
• Aetna HDHP $5000 80/50
• Anthem/Blue Cross High Deductible EPO
• Blue Shield Spectrum $2250
• PacifiCare Signature Elite PPO 2000
• UnitedHealthCare Consumer 1500/80% (6CH)
• UnitedHealthCare Consumer 2500/80% (S1Y)
• UnitedHealthCare Consumer 3000/70% (6CG)
• UnitedHealthCare Consumer 1500/100% (7AL)
• UnitedHealthCare Consumer 2000/100% (7AM)

If you are considering setting up a small business group and using an HRA as a tax advantaged consumer driven health plan. These are the plans to consider. Contact HealthInsurancePlus.com by phone at 1-877-758-PLUS for a health insurance quote on your group benefits.

Does Wall Street really own America’s Healthcare system? Neither Wall Street as an abstract, nor an insurance company in particular sets the prices doctors and hospitals charge for the care they provide. 

 

All the insurance companies are trying to do is negotiate those prices down for their members by using their buying power as leverage, and finance the cost of American’s healthcare over time.

 

People pay a premium to finance things. We pay interest on a home mortgage or an auto loan. The same is true with financing healthcare with health insurance. That is the business Wall Street and insurance companies are in.

 

Individual patients are welcome to go uninsured and pay cash for their healthcare thereby cutting Wall Street and the health insurance companies out of the equation completely. But who can afford that? The real costs are still the medical services, not the financing of those services.

 

Should only individual doctors, nurses, and other healthcare workers be able to charge for their services? Hospitals, insurance companies, and the like should have to work for free? That sounds a little greedy and naïve to me.

You can use this link to read the entire article (and the comments) that got me going on this. I hope it sheds some light on the current healthcare crisis and the health insurance companies role in it. 

We’re now offering four new lower-priced plan options in our HMO EmployeeElect portfolio to help you save money and retain your level of employee benfits. These new plans feature the same familiar plan designs as our existing HMO products, but offer significant savings.

Check out your savings potential with our new plans:

BCASH3992C (9/08)

*Average premium savings are rounded to the nearest tenth of a percent.
**Average dollars savings are rounded to the nearest dollar.
†Average savings are based on moving from the HMO 100% to the HMO $25 100% plan. Savings may vary. All savings are based on rates effective January 1, 2009.  All savings are based on single employee, ages 40 to 49, averaged across rating areas one through nine for one year.

Anthem Blue Cross is the trade name of Blue Cross of California. Independent Licensee of the Blue Cross Association. ®ANTHEM is a registered trademark. ® The Blue Cross name and symbol are registered marks of the Blue Cross Association.

Total health-plan costs per employee rose 6.3% in 2008 and are expected to rise by a similar amount in 2009, according to the Mercer National Survey of Employer-Sponsored Health Plans. Because of increased cost-sharing by employers, most workers also are paying a greater share of the costs out of their own pockets.

Next year, resolve to save money on medical expenditures by following four simple rules whenever possible:

1 Use in-network providers.
Most health plans either require you to use doctors and hospitals within their network (HMOs) or charge you more for going out of network. Staying inside the network when possible can save you hundreds or thousands of dollars.

When obtaining preauthorization or precertifications for surgery or other procedures, check to make sure that anesthesiologists, physical therapists and other care providers also are in-network, not just your physicians and surgeons.

2 Use the right provider.
Going to a hospital emergency room for nonemergencies like sniffles or scrapes because the doctor’s office is closed can set you back big time: Fees for such emergency-room visits can range from $300 to $500, while an urgent-care facility could charge $120 to $135, a primary-care office visit $65 to $75, and a retail clinic like those inside pharmacies, supermarkets and discount retailers could charge just $45 to $55, according to Cigna, a major insurer.

If your health plan has a nurse telephone or online hotline, use it to help determine which is the best course of action for a medical problem. Of course, for severe bleeding, shortness of breath, head injuries, chest pains, poisoning or other real emergencies, don’t hesitate to dial 911 and go to the nearest ER.

3 Prefer generics.
Most companies today use multitier drug plans that charge the least for mail-order generic prescription drugs and the most for brand-name or lifestyle drugs for which generic equivalents are available. Always ask your physician if a generic is suitable and available when he or she writes a prescription.

For instance, a commonly prescribed medicine such as the antidepressant Prozac could cost $154 a month at a retail pharmacy but $145 a month by mail order and as little as $4 a month if obtained as the generic fluoxetine hydrochloride.

Also, some commonly prescribed maintenance medications are available more cheaply in 90-day supplies from pharmacies at discount retailers, supermarkets and the like.

4 Use online tools.
These let you comparison shop for prescriptions, procedures and high-tech radiological services. A growing number of insurers are providing online tools that enable you to compare prices for drugs and procedures.

Aetna’s cost-transparency tool, for example, lets you compare the cost of PET scans, CT scans and MRIs in your area. The difference between free-standing and hospital-based testing centers can be as much as $200 to $300 a scan, says Jeffrey Kang, Cigna’s chief medical officer. You share in the savings if you’re in a high-deductible plan or pay co-insurance. But be certain the scanning facility is properly licensed and accredited by a group such as the American College of Radiology.

Google Health offers a place to store your personal medical information in one easy to locate place even if your insurance provider changes from year to year. This is a handy way to track your medical information online, and keep consistancy over a number of years even as your health care provider or insurance provider may change. Also if you move or travel for prolonged periods, it is a great way to have this information nearby rather than at the doctors office.

Consider puting healthy dependents and spouses on individual health insurance coverage or see if your spouse can get on group coverage through his or her employer. Often times employers only cover a portion of the premium for the employee, and the monthly premium for spouses and dependents can be signifigant. By putting children on individual coverage, you can exclued things like maternity coverage to help reduce costs. Also, generally medically underwritten individual health insurance is less expensive the guaranteed issue employer sponsored health plans.

URL:
http://www.aquacreek.com/lifts-pool-spa.htm

“<a href=”http://www.aquacreek.com/lifts-pool-spa.htm”Link

G. Do you wish to offer coverage for opposite sex domestic partners* under the age of 62 years?  Yes  No

Then just below the astrix is clarified:

* Anthem Blue Cross and/or Anthem Blue Cross Life and Health Insurance Company complies with State law requiring it to cover spouses and qualified registered domestic partners including dependents to the same extent and subject to the same terms and conditions as a spouse. To be an eligible domestic partner one must be a domestic partner registered under a valid Declaration of Domestic Partnership filed with the California Secretary of State, or an equivalent document in accordance with the laws of another jurisdiction recognizing the creation of domestic partnership.

The new Anthem guidelines seem to only apply to opposite sex domestic partnerships as opposed to same sex partnerships. This is a change in the wording since Anthem took over Blue Cross of California from Wellpoint earlier this year in 2008.  The old Wellpoint employer application left it up to the employer to say if they chose to offer coverage to domestic partners, same sex or otherwise. Obviously due to recent changes in state law and the state constitution with Proposition 8, and perhaps a change in company policy they decided to make some adjustments.  

It is interesting to note how other insurers are handling this political hot button and civil rights verses religious issue. Aetna for example assumes domestic partnerships to be covered the same as spouse, children,  or other dependant coverage,  and Aetna does not ask about gender as one of the requirements to qualify as a domestic partnership and have the domestic partner covered by the group health insurance benefits. Here is Aetna’s domestic partnership questionaire (pdf)

Overall it is interesting to note the change in insurance paperwork as we as a culture decide what is and what is not a marriage.